HIPAA regulations dictate that, as a health care provider working with health insurance companies, you need a National Provider Identifier (NPI) number. These 10-digit numbers are a way for the healthcare sector to identify health professionals consistently, and they are publicly searchable.
There are actually two types of NPIs, logically referred to as “Type I” and, yes, “Type II.” Type I NPIs are also sometimes called individual or personal NPIs, while Type II NPIs can be called either organizational or group NPIs.
So, what’s the difference between those types? Do you need one of each? Can you have one without the other? If you’re a sole practitioner, does a group NPI even need to be on your radar?
Sole practitioner = get a Type I NPI
Here's how it works: if you have a private practice, to file claims with health insurance companies, you'll only need a Type I NPI. This will always be your unique identifier across all companies (believe it or not, you used to need a different identifier for each company with which you were in-network). Your Type I NPI will stay with you throughout your career, and won’t be affected by geographic changes, for example, if you move and relocate your practice.
The exception: Medicare
The exception for the “sole practitioner = get a Type I NPI” rule of thumb is Medicare. If you are a sole owner operating under your LLC, you will need a Type II NPI if you plan to accept Medicare. You will have to apply for a Type II NPI using your EIN instead of just an SSN. (If you indicate on the Medicare application that you are Self Employed/Sole Proprietor then you can use your Type I.)
If you do apply to Medicare with your Type II NPI, you can file Medicare claims with that information once you’re approved and contracted. Continue to file claims with private payers using your Type I NPI.